Dealing With Credit Card Collection Agencies
If you have a credit card, chances are that you've used it for small purchases, such as dinner or a movie, and for larger purchases, such as a car rental, airline ticket or hotel reservation. Credit cards can be convenient, but that convenience sometimes comes at a cost: accumulated debt. If you have outstanding credit card debt and are unable to make payments on it, lenders may turn it over to a collection agency. It's important to know what rights you have when dealing with a debt collector.
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Instructions
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Write a letter to the collection agency and request debt validation. Under the Fair Debt Collections Practices Act (FDCPA), collectors are required to provide written proof that you actually owe the debt in question. This may include itemized bills from the original creditor, sales receipts from credit purchases or a signed contract, if applicable.
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Send the debt validation request to the collection agency via certified mail, return receipt requested. You must do this within 30 days of receiving the initial contact letter from the collection agency. You waive your right to seek debt validation if you fail to request it within this time frame; therefore, never ignore a collection notice.
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Wait to receive the debt validation. A collection agency isn't required to respond within a particular time frame; however, they cannot contact you again until they are able to provide validation. They also cannot take adverse action against you, like filing a lawsuit. If they validate the debt, they may resume collection activity.
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Order your credit report while you're awaiting debt validation. The Fair and Accurate Credit Transaction Act (FACTA) gives you the right to order one free credit report from the three bureaus: TransUnion, Experian and Equifax. FACTA established a website specifically for this purpose: Annualcreditreport.com. Also, you can order the reports from the bureau's website, by phone or mail.
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Read the "accounts" and "collections" section of the report. The Fair Credit Reporting Act (FCRA) prohibits collection agencies from placing unvalidated debt on your credit report. If such collection accounts are on your report, file a dispute with the credit bureau. You can do this online at the bureau's website, by phone or mail. Under the FCRA, the bureau has up to 30 days to investigate your claim and remove the item.
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Tips & Warnings
Collection agencies often buy zombie debt, which is debt that is beyond the statute of limitations, and try to get unsuspecting consumers to pay for it although their legal responsibility for it has expired. Check the debt statute of limitations in your state before making a payment.
Never check your credit report using a public or shared computer. It could lead to identity theft. Only use a computer that you trust.
